National Takaful Company (Watania), an Abu Dhabi-based sharia compliant insurance company under establishment will launch its initial public offering (IPO) on April 18.

The IPO plans to raise Dh82.5 million ($22.46 million), representing 55 per cent of the total share capital, said a statement.

Watania's founders have subscribed to an aggregate value of Dh67.5 million shares representing 45 per cent of the total share capital of Dh150 million.
 
The offer price for each share is fixed at Dh1 with an additional Dh0.05 as subscription fee per offered share. The shares will be listed on the Abu Dhabi Securities Exchange (ADX) and the subscription period will be open from April 18 until May 1.

 “Watania’s founding shareholders, Abu Dhabi National Islamic Finance (Adnif), Abu Dhabi National Insurance Company (Adnic), Abu Dhabi National Energy Company (Taqa) and Aldar Properties are among UAE’s strongest institutions, and their commitment to this company emphasises Watania’s capital strength,” said Aref Ismail Al Khouri, chairman of the founders’ committee of Watania and managing director of Adnif.
Islamic insurance or takaful penetration as compared to conventional insurance is lower in most GCC countries and this presents a huge opportunity for a new takaful operation, he said.

Recent statistics reveal that takaful gross contributions grew at a compounded annual growth rate (CAGR) of 83 per cent between 2004 -2009 whereas conventional premiums grew at a CAGR of 25 per cent.

Takaful gross contributions in the UAE are projected to grow at a CAGR of 30 per cent between 2010 and 2014, outpacing growth in the overall insurance sector (CAGR of 17 per cent) during the same period, the statement said.

“Watania will provide a unique suite of Shariah compliant general and medical insurance solutions to its customers and play a significant role in developing the takaful industry in the UAE. Watania’s financial strength and capacity to retain risk, as well as the utilization of state-of-the-art technology to lower operational costs, will ensure greater profitability and maximized efficiency,” Al Khouri said.

The IPO offering is over two tranches with one tranche for UAE national individuals having a guaranteed allotment, and the other tranche open to all investors having a pro rata allotment. 20 million shares, or 13.33 per cent of the total capital, will be open to UAE national individuals only, who can subscribe to 5,000 shares whereas 41.67 per cent of the total capital will be open to all individuals and institutional investors in the UAE, GCC and other investors who can apply for a minimum of 10,000 shares, with additional subscriptions in multiples of 1,000 shares. The refund date has been set for May 15, 2011.

The National Bank of Abu Dhabi (NBAD) has been mandated to be the financial advisor, lead manager, and the receiving bank for the IPO.  –TradeArabia News Service